So just what is Cryptocurrency?

Cryptocurrency is a digital currency that uses encryption to regulate currency units and transactions. Unlike traditional centrally-controlled currencies, cryptocurrencies operate on a peer-to-peer network which making them decentralized — no one entity has complete authority.

The most famous of these “Cryptos” is Bitcoin. Bitcoin was created in 2009 by an anonymous individual or group called “Satoshi Nakamoto”. Who is he, what is he, where is he, etc… We’ll never now. But since then, thousands of other cryptocurrencies have been developed and released, each with its unique features and use cases. And with their own stature.

Each of these cryptos are created through a process called “mining”. It’s complicated. Mining involves using powerful computers to solve complex mathematical equations. Transactions are recorded on a public ledger called a “blockchain”, which is basically network of nodes/computers.

Cypto, unlike fiat, has the advnatage of a higher degree of privacy and anonymity. Users can make transactions without disclosing their personal information. Cryptocurrencies are also highly secure, making it difficult for hackers to steal or manipulate funds.

But, not all is well and sound.

Despite these advantages, there are pitfalls. Cryptocurrencies face challenges from volatility and instability due to market fluctuations. And, some governments are considering regulating or even banning cryptocurrencies due to concerns over their use in illegal activities.

Trust, bad press, complexity, the “monthly sandal”, and poor sentiment also weigh in as factors

That said, experts do believe that cryptocurrencies have the potential to revolutionize the financial industry. And it’s already under way.

By Nathan Harris

Nathan is a long-time investor in crypto and a co-founder of PandaVana.com.

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